| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 70 | 24.8x | 17.8x | Top tier | |
Growth | 79 | 9.5% | 7.1% | Top tier | |
Quality | 52 | 5.9% | 4.5% | Around median | |
Safety | 55 | 1.2x | 2.6x | Around median | |
Capital Return | 39 | 1.83% | 2.12% | Bottom tier | |
Momentum | 46 | 41.6% | 2.9% | Around median | |
Sentiment | 72 | 14 | 3 | Top tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Southwest Airlines Co. is an airline focused on the U.S. domestic market, with its business built on the largest domestic network and the highest number of nonstop flights, according to management, while ranking first at approximately half of the 50 largest U.S. airports. The company generates revenue from ticket sales, baggage fees, upgrades to higher fare classes, the Rapid Rewards program, co-branded Chase cards, as well as travel agency channels and airline partnerships. These initiatives have broadened its revenue sources, while the next phase of the transformation focuses on network optimization, product pricing, and growth in corporate customer and co-branded card revenue.
In Q2 of fiscal year 2026, EDGAR data showed revenue of $8.4 billion, net income of $233 million, and earnings per share of $0.47, while management reported record adjusted operating revenue of $8.7 billion and adjusted earnings per share of $0.94. Adjusted operating revenue rose 20.3% year over year with capacity growth of only 0.2%, and adjusted unit revenue increased 20.1% to the highest quarterly level in the company's history. The adjusted operating margin was 6.7%, up 3.3 percentage points year over year, despite an increase in fuel expense of approximately $900 million.
Commercial mix growth in Q2 of fiscal year 2026 came from several sources: corporate customer revenue rose 30% year over year to a quarterly record, new Rapid Rewards member enrollments increased 35%, bringing total program membership close to 100 million members, and acquisitions of co-branded Chase card accounts rose 28%. At the same time, net income for the twelve months ended in 2026 increased to $837 million on revenue of $30.1 billion, compared with net income of $441 million and revenue of $28.1 billion in fiscal year 2025.
The average analyst price target is $53.79, within a wide range of $36.10 to $65, while the stock's 52-week range is between $29.26 and $55.11; accordingly, the average target is near the historical upper end, and the highest target exceeds that level by approximately 18%. The analyst consensus is Neutral, and no price-to-earnings ratio is provided in the data, so the stock's valuation depends heavily on achieving the fiscal year 2026 adjusted earnings-per-share outlook of $3.25 to $4.25 and on the company's ability to balance revenue improvement against fuel and cost pressures.
Figures in the text are as of 2026-08-29; the live price is shown at the top of the page.
Adjusted operating revenue rose 20.3% year over year to a record $8.7 billion, with capacity growth of only 0.2%. Adjusted unit revenue increased 20.1%, driven by baggage fees, fare upgrades, travel agencies, Chase revenue, and strength in the core business. EDGAR data showed revenue of $8.4 billion, net income of $233 million, and earnings per share of $0.47, while reported adjusted earnings per share were $0.94.
Management expects adjusted earnings per share of between $3.25 and $4.25 in fiscal year 2026. This range replaced a previous outlook of at least $4 and was based on the fuel price curve as of July 17, 2026, and the assumption that the demand and pricing trends in place when the outlook was issued would continue. The company estimated the negative year-to-date fuel impact at approximately $1.33 per share, but it still expects significant earnings growth and margin expansion.
The company expects unit revenue growth of between 17.5% and 19.5% year over year in Q3 of fiscal year 2026. Approximately 65% of bookings for that quarter were in place at the July 23, 2026 call, and yields were 24% higher year over year compared with an increase of 13% at the equivalent stage of bookings for the previous quarter. The reported growth rate is below the 20.1% recorded in Q2 of fiscal year 2026 because baggage fees and other initiatives are being compared against a higher base dating to 2025, according to management's explanation.
Automated analysis for informational purposes only — not investment advice.
New Rapid Rewards member enrollments rose 35% year over year in Q2 of fiscal year 2026, bringing the program's total size to a record level approaching 100 million members. Acquisitions of co-branded Chase card accounts also increased 28%, and loyalty tier qualification activity reached a record level. Management considers these indicators a foundation for increased card spending and partnership revenue as customer engagement with the new products matures.
Average fuel cost was $3.92 per gallon in Q2 of fiscal year 2026, and fuel expense increased by approximately $900 million year over year. The company also expects cost per available seat mile excluding fuel to rise between 3.5% and 4.0% in Q3 of fiscal year 2026 with capacity flat to down 1%. In addition, the company needs to address small daily aircraft turnaround delays, while the speed of STARLINK deployment depends on the availability of antennas from the supplier.
Southwest Airlines ended Q2 of fiscal year 2026 with liquidity of $5.3 billion, compared with a target of approximately $4.5 billion. The total leverage ratio improved to 2.1 times from 2.4 times at the end of fiscal year 2025 and remained within the stated range of 1 to 2.5 times. The company also generated approximately $2 billion in operating cash flow during the first half of fiscal year 2026, but its conversion into free cash flow will remain tied to the timing of aircraft deliveries and capital expenditures.
